Market Cracks: Warning Signs in Tech, Bonds, and Gold

Summary

While the S&P 500 saw a slight gain leading into the holiday weekend, major market leaders like Nvidia and Walmart are showing significant cracks, indicating a thinning rally. This underperformance from key stocks, alongside equal-weight indices, is a warning signal. Technicals show the S&P 500 is at a critical juncture, needing to break a recent high to maintain its bullish bias, otherwise, it risks forming lower highs and lower lows. Meanwhile, the 10-year Treasury yield is testing support around 4.5%, and oil has broken below a key wedge pattern, suggesting potential downside. However, the connection between falling oil and lower yields is complicated by high global debt and US interest rates at multi-year highs, creating uncertainty. Even traditional risk assets like gold, silver, and Bitcoin are down despite a rising Nasdaq, further signaling a potential divergence. The market's breadth is deteriorating, with more stocks hitting new lows as the market makes new highs. Finally, the accelerated IPO of SpaceX suggests institutions are rushing to exit before potential market weakness. These combined factors point to emerging issues that investors can no longer ignore.